Best value - The way that things are done

Claire Ward looks at how the best value duty came into being and what the future holds in light of proposed revisions to government guidance.

As the Government continues to consider the consultation on the latest revision of the statutory Best Value guidance it would be easy to follow the sensational headlines and focus solely on the intervention powers of the Secretary of State that are now set out now detail. But that I suggest would be a disproportionate focus on what best value is all about. A better understanding can be achieved with a look back through the history books which provides the context of what was trying to be achieved and how now, some 23 years on, might be the opportunity for best value to cement its relevance.

In the 1980’s the Conservative Government at the time introduced Compulsory Competitive tendering (CCT) for construction, maintenance and highways work under the Local Government, Planning and Land Act 1980 with the rationale that the private sector would deliver services more efficiently and cost effectively than traditional inhouse services. As the years went on more and more services were subject to the compulsory regime including cleaning, refuse collection and then professional services like property, HR and legal services under the Local Government Act 1988. The regime enabled private companies to bid for contracts to deliver public services in competition with council-run departments. The idea was to improve value for money through a proscribed competition process and consequently many municipal services were restructured so they were able to successfully compete or they were transferred to be run by private organisations.

In 1997 Labour’s manifesto was to replace CCT with a new duty of Best Value which, following their election, was in force on 1 April 2000 in the Local Government Act 1999. This Act established every English local authority (not including parish councils) as a best value authority and created a statutory duty under section 3 to;

“make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.”

The Act included a statutory duty to consult in certain circumstances and a requirement to have regard to any guidance issued by the Secretary of State.

Whether councils were complying with their best value duty was measured by a system of audit and performance monitoring through best value performance plans, indicators and reviews. With the Secretary of State having the power to intervene when there was evidence that a local authority was failing to comply.

The concept of best value extended the desire to achieve the best outcome by aligning itself with the functions of a local authority rather than the categories of services being delivered. The focus changed from externalising services to a more holistic approach. Underhill LJ in R (Nash) v Barnet LBC [2013] EWHC 1067 (Admin), [2013] LGR 515, at paragraph 69(1), identified that the core subject matter of the substantive best value duty as “the way in which” the authority’s functions are exercised. The duty was about the whole of the council and put simply was all about “the way things are done around here”.

This new concept provided the prospect of embedding a new culture at the heart of every council. The only problem was the performance monitoring framework created a plethora of metrics and systems behind it to plan and evaluate a local authority’s effectiveness. There is no denying it created an industry, that was repeated in every council office up and down the country. In 2008 the national performance framework was removed, leaving councils to themselves to make their own assessment and arrangements with only statutory guidance to rely on.

The Labour Government 2008 “Creating Strong, Safe and Prosperous Communities” best value guidance advocated a community focus on desired outcomes that were more likely to be achieved where there was a positive approach to a mixed economy rather than one supplier dominating the market. This could be achieved through commissioning and taking appropriate measures to support and incentivise service providers including small and medium enterprises to maximise their capacity to deliver. There was no focus here on how an authority’s functions were to be exercised and although there was a move away from the language of competition, commissioning of services was still the place where best value was seen to be relevant.

In 2011 the new Conservative Secretary of State issued fresh best value guidance in standalone form which asked local authorities to look at the overall value when reviewing service provision. The focus on commissioning was replaced by the idea of collaboration to increase the involvement for voluntary and community organisations. This was all in the context of austerity and the Big Society agenda, which coincided with plans to repeal the power of councils to promote well-being under the Local Government Act 2000. The 2011 guidance reintroduced the concept of best value but again, there was not a link to the internal workings of a council or how an authority’s functions are exercised.

The next iteration in 2015 did not provide any more guidance on best value but gave direction on funding. It is three pages in length and is all the best value content councils have had to work with over the last 8 years, reflecting in my view a continued disinterest in the exercise of council functions and the way things are done.

The draft 2023 guidance however returns to the detailed format of the 2008 guidance. The focus is again on all the systems in a council and the way in which things are done. It lists indicators to identify what are characteristics of a well-functioning authority and potential areas for failure. The indicators are clearly taken from recent public interest reports, best value reports and interventions and cannot simply be treated as a questionnaire that elicits a yes or no answer. But it is a welcome health check for local authorities that wish to assure themselves of their own arrangements. There is now a description of what standards are expected and although many may seem obvious, they do serve as a useful reminder and tool to enable review and effect a programme of change if it is needed. I don’t think the indicators will suit every council and it will be a matter of weight and degree as to how each council assesses itself. But those councils with a desire to show they are continually improving can use the guidance to refresh their approach and assess as part of their annual governance statement the status of their current arrangements.  

The guidance has a clear emphasis on the intervention powers of the Secretary of State which is understandable given the absence of clarity and understanding up until now about how that actually works in practice. At the same time I do feel this is unfortunate because, to the extent that interventions are no longer such a rare occurrence, it is still only a small percentage of councils who find themselves in such circumstances.

On the whole the 2023 guidance puts best value back in the heart of local government as a core duty. It describes how the duty is engaged and provides a flexible framework to assess the way in which things are done at a council. It provides an assurance framework which councils can use in their plans to deliver continuous improvement and evidence that best value is being achieved. Once issued I think the guidance will be a useful tool for monitoring officers and one that will help to continue the conversation about why governance is such an integral part of an effective local authority.

Claire Ward is a partner at Anthony Collins. She can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..